Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26815
Authors: 
Stiebale, Joel
Reize, Frank
Year of Publication: 
2008
Series/Report no.: 
Ruhr economic papers 50
Abstract: 
This paper contributes to the ongoing debate on the welfare effects of foreign direct investment by investigating the effects of cross-border mergers and acquisitions on innovation activities in target firms. The empirical analysis is based on survey and ownership data for a large sample of small- and medium- sized German firms. After controlling for endogeneity and selection bias, it is found that foreign takeovers have a large negative impact on the propensity to perform innovation activities and a negative impact on average R&D expenditures in innovative firms. Furthermore, innovation output, measured as the share of sales from product innovations is not significantly affected by a foreign takeover for a given amount of innovation efforts. Hence, the estimation results do not show any evidence of significant technology spillovers through foreign direct investment in form of a higher innovation success.
Subjects: 
Multinational enterprises
mergers and acquisitions
innovation
JEL: 
D21
F23
G34
C31
O31
O33
ISBN: 
978-3-86788-053-4
Document Type: 
Working Paper

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